IRS Updates IRS Publication 590 for 2012

Monday, February 11, 2013

By Beverly DeVeny, IRA Technical Expert

Follow Me on Twitter: @BevIRAEdSlott

The IRS updated Publication 590, Individual Retirement Arrangements (IRAs) For use in preparing 2012 Returns. This publication is a good source of basic information about Traditional and Roth IRAs, simplified employee pension (SEP) plans, and savings incentive match plans for employees of small employers (SIMPLE) IRA plans. It explains the rules for setting up and contributing to an IRA, moving money to and from an IRA, handling an inherited IRA, and receiving distributions. It is used by taxpayers and tax preparers when filing 2012 federal income tax returns, IRS Form 1040.

Pub 590 contains a section called “What’s New for 2012.” Some of the notable 2012 IRA changes are:

  • If you were covered by a company retirement plan for 2012, your Traditional IRA tax deduction is reduced (phased-out) if your modified adjusted gross income (MAGI) is between $92,000 – $112,000 if you are married filing jointly ($58,000 – $68,000 if you are single or head of household).
  • Your ability to make a Roth IRA contribution is reduced (phased-out) if your MAGI is between $173,000 – $183,000 if you are married filing jointly ($110,000 – $125,000 if you are single or head of household).
  • Tax-free qualified charitable distributions have been reinstated for 2012 through 2013.

It also highlights IRA changes for 2013, such as the new income and contribution limits for IRA contributions, and new phase-out ranges for Traditional IRA deductibility and Roth IRA contributions. For example, the maximum IRA contribution for 2013 increased to $5,500 if you are age 49 or younger and $6,500 if you are age 50 or older.

While Pub 590 provides basic information on IRAs, it can never be used as a substitute for IRA information that’s contained in the law or regulations. Also, it should not be used in place of advice from a tax or legal advisor. If you need tax or legal advice, you should speak with a tax professional.

Article Highlights:

  • The IRS updated Publication 590, Individual Retirement Arrangements (IRAs) For use in preparing 2012 Returns.
  • It provides basic IRA information but cannot be used as a substitute for tax or legal advice.
 

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